Government insists on sole control of bottled water prices

The government on Tuesday insisted that it retain sole discretion in setting price caps for bottled water at designated points of sale, under a bill being discussed in parliament.

The proposed legislation gives the commerce minister the authority to issue decrees establishing a maximum price for bottled water at sites such as airports, stadiums, cinemas, beach cafés and theme parks.

It does not apply to supermarkets or kiosks.

The stated aim is to protect consumers from price gouging.

In parliament, Commerce Minister George Papanastasiou said the key issue concerns what should be regarded as ‘reasonable profit’ for merchants.

Whereas conceding that the term ‘reasonable’ is subjective, the minister said merchants want to maximise profit while the government wants to protect consumers.

“So we have differing interpretations of the term.”

He noted also that the ‘reasonable profit’ – in setting the price cap – will differ between the airports and beachside establishments.

Asked by an MP why the government should not instead confer with affected merchants prior to deciding the profit margin – and thus the price ceiling – Papanastasiou said this would lead to endless discussions over semantics.

And allowing merchants to appeal a ministerial decree every time would likewise produce a stalemate.

According to the minister, given that a business’ viability depends on its revenues and expenses, a business may decide to raise its prices on products other than bottled water if it sees that its profits are adversely affected.

This drew a response from MP Kyriacos Hadjiyiannis (Disy), who countered that the minister was in effect encouraging businesses to “gouge” consumers on other products.

“It’s irrational that the state should be the one to determine the costs of a business,” Hadjiyiannis said.

Another disagreement over the coming legislation relates to whether the minister can unilaterally alter the affected points of sale in every price cap decree he issues.

MPs want parliament to have some input on this – but the government wants to retain sole discretion.

The original bill setting maximum prices on bottled water had been approved by cabinet in March last year.

Back then, Papanastasiou had said some retailers may react negatively to the plan as “they would like to be able to set prices themselves in a free market.”

But, he added at the time, “when it comes to some products, such as water, the price must somehow be controlled, because at these specific points of sale some prices are not justified.”